Morton plans to return cash

Press, 26 November 1987, Page 32

Morton plans to return cash

PA Wellington Morton Equities says it will return 24c a share to shareholders as it wanted to concentrate on wine production rather than be seen as a cashbox investment company. The managing director, Mr Morfon Brown, said the sharemarket downturn was behind the move and "the belief that the investing public would have a better perception of Morton as a high quality wine company without the so-called cash box element.” Mr Brown said the "cash box element” had originally been intended to allow Morton to invest in activities compatible with the core business and provide an entrepreneurial element for the central wine investment. But the investment activities had tended to overshadow the potential of the wine business and its appeal as an investment. Mr Brown said the company's funds had been invested in short term bank securities and had not been exposed to the sharemarket plunge.

The company would make a bonus issue of shares in subsidiary Pimento Holdings to Morton shareholders and would transfer cash from Morton to Pimento Holdings. Morton shareholders would receive one bonus share in Pimento Holdings for every two Morton shares they held. Pimento Holdings would have 8,880,000 shares on issue and its initial assets would include $4,260,000 of cash and short term securities currently held by Morton. The new company’s cash asset backing would be 48c a share. Mr Brown said he would Increase his 40 per cent shareholding to approximately 50 per cent and the Hamelyn Group would keep a 20 per cent Interest In the company. Hamelyn Group would buy Mr Brown’s entitlement to Pimento Holdings shares at their asset backing of 48c a share and would offer minority shareholders the alternative of cash or shares in the reconstructed Morton Equities for their stakes in Pimento Holdings.